Greek Referendum on IMF/Troika deal

[Velasco]

If the Greek people votes on honor they will vote no.  If they vote on, to be fair, short term material interests, then they will vote yes.  Donald Kagan theory says they will vote no to preserve their honor.  We will see if Donald Kagan was right.

Do you think so? Is there some "honor" to protect after years of being trampled by the Troika? Greek people has a dignity, but if they vote "no" it will be probably due to weariness and exhaustion. From a materialistic perspective they have very little to gain voting "yes", because the deal is basically more of the same medicine whose effects they now well. Thus, there's not an actual choice between "honor" and "material interests". They are condemned to suffer anyway and the path of austerity does not represent a promise of a better future. If they choose "no", even if they are motivated by "honor" and "dignity", I'm afraid that won't prove the theories of a certain Kagan.

[Velasco]

The economic adjustment Greece must go through will be born by the middle and lower classes.  

For what reason? Why the 'adjustment' must fall on middle and lower classes? Are upper classes exempted in completion of some divine law? Are you sure that there are no other options? Defaulting on the IMF and ECB, for instance? Have you considered the moral and political implications of your assertion?

[Velasco]

He simply has considered the implications of defaulting on IMF and ECB.

He implicitly admitted that the choice is between sudden impact and agony, given that apparently is "set in stone" that both ways lead to impoverishment. Do you think is better defaulting on lower and middle classes?

[Velasco]

He simply has considered the implications of defaulting on IMF and ECB.

He implicitly admitted that the choice is between sudden impact and agony, given that apparently is "set in stone" that both ways lead to impoverishment. Do you think is better defaulting on lower and middle classes?

Ah, but all options include that, I am afraid. There is no choice there. At least none, that anybody - including the current Greek government - would consider.

If there's no choice is because some of the parts involved want it in that way. In case there had been an actual interest in finding some relief for Greece, they would have considered options like the one exposed above. Needless to say that all is morally nauseating.

[Velasco]

He simply has considered the implications of defaulting on IMF and ECB.

He implicitly admitted that the choice is between sudden impact and agony, given that apparently is "set in stone" that both ways lead to impoverishment. Do you think is better defaulting on lower and middle classes?

Ah, but all options include that, I am afraid. There is no choice there. At least none, that anybody - including the current Greek government - would consider.

If there's no choice is because some of the parts involved want it in that way. In case there had been an actual interest in finding some relief for Greece, they would have considered options like the one exposed above. Needless to say that all is morally nauseating.

No Greek government has ever asked for anything that would realistically help its middle class or its poor. Most definitely, THIS Greek government has not. They cared too much about pride and not enough about their own people.

How can this Greek government help realistically the middle and lower class when it's depending on the financial assistance of certain institutions demanding more and more burdens on that sector of the population?  

[Velasco]

They should have been asking for social programs helping to deal with the dislocation. It should have been a negotiated exit from euro. Of course, it would have required certain humility.

Was Grexit a starting point in the bargaining between the new Greek administration, the EU and the other institutions? I'd swear that some sworn statements were made, assuring that Greece would stay in the Eurozone and in neither case send to the cold. I'm not sure what kind of humility is some people asking for. Given how Greeks have been treated by the Troika and the current Greek administration demonised, certain statements are quite understandable. Maybe Tsipras and other cabinet members should have been a bit more cautious with words but... 'humble'?

[Velasco]

When you go begging for money, you do well to be somewhat restrained in insulting the people you ask to give you the money. Seems like common sense.

Yes, in spite of the fact that the damage done to Greece by the Troika can be deemed criminal, it's possible that calling the IMF a "criminal gang" is not politically wise when you are in a disadvantageous situation.  That's why I said that possibly they should have been more cautious. However, you don't take into account that Greeks have been offended by those asking them for 'humility'.

But the point is, actually, it would have been a lot better, from the standpoint of an average Greek, if Grexit had been negotiated by the previous Greek government. Because what is happening today seems to be a huge disaster, into which Greece is driven headlong by a bunch of headstrong amateurs.

This has nothing to do with being leftist or rightist. But everything to do with caring a lot more about national pride than about one's own people.

Samaras negotiating an exit from the Eurozone in acceptable conditions for Greece? That sounds like science fiction. Given that many economists admit that the debt is impossible to pay in its entirety, I think it would have been more reasonable negotiating a debt restructuring in exchange for actual reforms which set the foundations of a future growth and allow running a reasonable surplus without strangling people. That way Greece could repay at least a part. Instead, the "institutions" demand more and more cuts. You say the question has little to do with the left and the right, but there's an obvious ideological motivation behind the stubbornness in persisting in recipes that have proved to be a failure. Such intransigence is a crime. If winning the ideological battle implies permitting a Grexit and opening a new period of uncertainty in the Eurozone, they seem ready to assume the potential risks. Can anybody say with honesty that the risk of contagion is totally neutralised?  

[Velasco]

Paul Krugman thinks that Tsipras made the correct decision. It's the "Europe's Moment of Truth", he says.

http://krugman.blogs.nytimes.com/2015/06/27/europes-moment-of-truth/?smid=tw-NytimesKrugman&seid=auto&_r=1

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I've just read a brutal article written by Wolfgang Münchau a couple of weeks ago warning that the Eurozone crisis will last 20 years.

[Velasco]

Finding a "sustainable solution that puts Greece on a path toward reform and recovery within the Eurozone" and including (key point) a discussion on a potential debt relief for Greece would be a little victory for everybody (with the exception of austerity mongers, sadists and people with a taste for revenge, of course).

[Velasco]

By now it look unlikely that a Greek bankrupcy will have much bigger effect outside Greece than a few bad days for stock exchanges. So the primary goal seem to have succeed. The Greek got a opportunity and they didn't take it, that's sad, but now it's them who are going to pay most of the price.

That's gibberish. Safeguard mechanisms haven't been tested and austerity mongers feel less secure about success than they want to admit, for obvious reasons. Mariano Rajoy, for instance, states that Spaniards can be calmed because "over the past years, with their effort, have supported 'reforms' carried out". These are empty words and he's merely playing to the gallery. Actually there is a big concern in governments of countries like Spain or Italy (not to mention countries much more exposed like Cyprus). Austerity pawns like Mr Rajoy fear Grexit, and for good reasons.     

[Velasco]

So far Europe is containing the contagion.  

So far. The acid test is the Grexit itself. Personally I wish that contingency can be avoided, as well we need desperately that the parts involved find a "sustainable path" for a solution etcetera. However I know that turkeys in Germany and other places are giddy with excitement, because they adore Christmas.

[Velasco]

No one in their right mind would want to go back a week ago. This endless vicious circle must be broken and Grexit is certainly the worst solution for everybody, right and now.

[Velasco]

Greece should vote "no" and be ready to leave the Euro if necessary, says Krugman.

http://www.nytimes.com/2015/06/29/opinion/paul-krugman-greece-over-the-brink.html?_r=0

Well, Greek government has chosen it. And wants its choice ratified in a popular vote.

No, that's false. Greek government has faced an ultimatum and refused to submit for legitimate reasons. Given that the situation is desperate, it's almost mandatory to confront the decission to people's verdict.

[Velasco]

More opinions.

"The way to Grexit and Beyond"

by Wolfgang Münchau

Financial Times
June 28, 2015

When a shock you predicted actually happens, it still feels like a shock. Alexis Tsipras was right to walk away. But it was a momentous decision nevertheless when the Greek prime minister rejected an offer that would have allowed it to pay its debt to the International Monetary Fund and the European Central Bank. What I am struggling to understand is why he suddenly decided to call a referendum on whether to accept a bailout for next Sunday.

There might be some super-smart strategy behind this beyond my capacity to comprehend. The problem with the referendum is that the offer on which the Greek people are asked to vote is no longer on the table. And the programme to which it relates expires tomorrow at midnight. Why should the Greeks vote Yes to a package the creditors themselves no longer support?

By far the biggest tactical error committed over the weekend, however, was the rejection by eurozone finance ministers of a five-day extension of the Greek bailout programme to beyond the referendum. With that decision, they foreclosed the only way to keep the show on the road. They have unwittingly strengthened the political argument of the Greek prime minister. He will now be able to say: first the creditors wanted to destroy the Greek economy with their austerity programme. And now they are hoping to destroy Greek democracy.

The Greek government's "legitimate reason" seems to be simply that they lilke seeing Greek children starve.

If they like to see children starve, it's a rather weird strategy. In that case it would have been easier just to follow the Troika's instructions.

[Velasco]

Where I disagree are three things. A. - I do not believe the other Europeans are to blame. They are also democracies and it is unrealistic to insist they subsidize Greece. Condititional on Greeks asking for subsidies they were getting much softer treatment than what any non-European country in similar circumstances would get from creditors.   B. - I do not Mr. Tsipras has any particular reason to politically exist. Especially under the circumstances. And C. - I tend to despise politicians for whom national pride and independence mean more than the wellbeeing of their citizens.

Well, the argument of Europe subsidizing Greece is a clear strawman. EU taxpayers have been subsidizing other people through Greece. Obviously EU countries are democracies and the large amounts of money invested in bailouts are understandably unpopular. The second reason you give is understandable under your point of view, and funnily enough it's shared by the "negotiators". It's not strange that they seek to destroy Tsipras politically, since their purpose is holding on the asuterity dogma despite all contrary evidence... or should I say that people like Legarde realised that old recipes don't work but would prefer dealing some kind of relief with someone less politically uncomfortable? Finally, I'm not a fan of nationalisms of any kind. However, it's understandable that appeal to national pride given how Greek dignity has been trampled. On the other hand, it would be disingenous to deny a remarkable dose of nationalism and prejudice on the 'other side'. Don't you read German press?

[Velasco]

1. I am sorry, but the Greek problem started because Greeks borrowed more than they could repay. Not because the Germans did, not because the French did, not even because Lithuanians or Bulgarians did. Yes, they should not have been permitted to - no doubt of that. But it was their decision to borrow. Right now the discussion is about subsidizing that consumption that Greeks already had - but it does not stop being Greek consumption.

2. Given that Greeks continued to insist that they want to stay in the eurozone, other countries did what they could. If anything, they have been bending backwards for Greeced. Mexico would never get such terms and so much patience. I do not see what would a Greek government have to feel upset about. Greek people - that is another matter. They are being screwed, and I do not blame them for tossing out the previous governments that got them there. Unfortunately, the only one left available was this nincompoop.

3. Yes, of course, Greeks should not have insisted on staying in the eurozone. They would have been a lot better of in the first place.

4. I have been avoiding expressing an opinion on Mr. Tsipras till now. It is his irresponsible behavior of the last few days that made me say things I am saying.

5. When you go asking for money you'd better supress your pride. If you cannot - do not ask for money.

It's not my intention to prolong this endlessly but, isn't it a bit simplistic the idea of blaming only past Greek governments? Right now, if I want to go to a bank in order to get a credit it's not as easy as taking the decision to borrow. However, some years ago it was different. If I only earned a modest wage, my bank would have encouraged me to get a consumer credit or (even worse) a mortgage loan. Are you familiar with the drama taking place in Spain? Do you approve what is happening with thousands of families trapped in loans impossible to repay? Are you sure that lenders have no responsibility at all?

On the other hand, you can't blame Greeks for insisting to stay in the Eurozone. A majority of the population wanted to stay, and it's understandable because the prospect of being sent to the cold is terrifying. They should not have joined, in the first place (isn't there liability on the part of 'Europe'?) Once a country is inside that terribly disfunctional mechanism called Eurozone, it's impossible to leave without paying a high price.  Also, any Greek leader with a minimum of dignity has every reason to feel upset about the way "institutions" have treated the country,; political affiliation doesn't matter when we are talking about something as fundamental as dignity. What was the point of throwing astronomic amounts of money while, at the same time, "institutions" were pushing the country down with extravagant demands? What was has been the usefulness of the high price paid by the population, due to the implementation of wrong policies based on absurd dogmas and fanaticism? Now, with all the damage done, the solution is as simple as washing hands and getting rid of Greece. Do you think that the problems of the Eurozone will end with that? According to some voices, Grexit might be well the beginning of a period of stagnation and decline in all the Eurozone. Time will tell, but for sure what are doing Europe and the "institutions" is morally repugnant.

Of course, you can have whatever opinion you want about Tsipras. I think others are much worse than him. Also, I have a legitimate concern. Sadly, my country is trapped in the Eurozone and is vulnerable to a potential financial turbulence. Even if European leaders had the intent of fixing the Euro, and there's no reason to think that they have, it would take years building a solid structure.

 

[Velasco]

I think even Athens has begun to grasp in the 24hrs exactly how little interest Germany has at this point in Greece remaining within the Euro.

At this point, I am afraid, Mr. Varoufakis should be standing on his knees in Berlin, pleading with Mme. Merkel for European solidarity and promising to personally wash dishes in the Bundestag cafeteria.  He does not have many other cards to play.

I assume that you would be pleased with that, right? Probably Frau Merkel would like to see all of us, lazy southerners, washing dishes or wearing livery. In my opinion, we should turn the so-called European Union into a theme park. It would be called Euro Dystopia and it would have some features borrowed from Euro Disney. Some friendly guides, disguised as Juncker and wearing Mickey Mouse ears on the head, will show you the attractions including, among other wonders, your Greeks washing dishes in the Norman Foster's Bundestag. Seated upon her throne, Mme Merkel would smile with condescension dressed like Daisy. Things are ugly enough to care about blabbering here, honestly. Enjoy your hatred, folks.

[Velasco]

All your concern about solidarity and justice stops at the Mediterrainean (ok, at the gates of Melilla).

I won't bother to type a reply to your previous post, but I must say that is false. Not all people in Spain and other southern countries is as indifferent to the drama, at the gates of Melilla or at the shores of Lampedusa, as people in other places of Europe*. Note that I'm saying "people"; our government stinks in that regard as it does in many others. There are many examples of solidarity that I could mention. Your tone sounds a bit insulting, to be honest. Anyway, I don't care too much and I'm not resentful. Have a good day.    

*On a side note, a sample of EU hypocrisy on the subject can be found in the last summit on migration, failed as usual due to "national egoisms".

http://www.reuters.com/article/2015/06/25/us-europe-migrants-summit-idUSKBN0P52HE20150625

[Velasco]

Greek supreme administrative court will rule on the legality of the bailout referendum Today.

The court just ruled it's legal.

... and Tsipras calls to vote 'No'

http://www.nytimes.com/2015/07/04/world/europe/alexis-tsipras-greece-debt-crisis-referendum.html?ref=world&_r=0

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This is relevant:

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"I.M.F. Says Greece Needs Debt Relief, but Blames Government Lapses"

http://www.nytimes.com/2015/07/03/business/international/international-monetary-fund-greece-debt-report.html

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The report blames the current Greek administration, assuring that "Greece’s economy had reached a point where Athens would have been able to make debt payments in years to come". However, as the article points in a paragraph placed well down, "many economists regarded Greece’s debt as having been unsustainable even before the governing party, Syriza, took office. But the I.M.F. report argues that the debt load was on its way to becoming manageable because of low interest rates and an improving economy".

This is revealing too:

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[Velasco]

All your concern about solidarity and justice stops at the Mediterrainean (ok, at the gates of Melilla).

I won't bother to type a reply to your previous post, but I must say that is false. Not all people in Spain and other southern countries is as indifferent to the drama, at the gates of Melilla or at the shores of Lampedusa, as people in other places of Europe*.

So that is really your only objection?

I have more, ag. You throw many oversimplications and strawmen. It happens that the subject goes a bit off-topic and, unlike you, I don't enjoy trolling very much.

[Velasco]

The "straw man" you have used is a fictional person, or group of persons, who think that "theres [sic] an unlimited cache of money waiting for somebody if they just declare "Austerity = Over." Unfortunately no one actually expressed this belief.

I'm afraid that terrible poster is not the only hot head in this thread. Apparently, ag thinks that I'm complaining because manna ceased to flow toward my country and I want that people feel sorry about me, as well accuses me of being ungrateful. Well, no. I don't remember having put in writing such a thing. I truly appreciate the advantages of joining the "club" back in the 80s. I think governments in my country allocated badly the funds with their excessive enthusiasm for infrastructures, but that's another question. But now I feel really sorry for the people who is actually suffering the consequences of misguided policies, in my country and elsewhere in Europe, and not really for myself. I can see the results every day around me. As well, I deplore the current drive of the Continent and fear the place where it's heading towards. I don't blame such drive only, I'm very critic of past and present governments in my country. It's quite deplorable that certain posters interpretate that I'm begging for alms or something, only because of some geographical accident. And the Greeks... they are really much worse than us. However, and despite their pains have been aggravated by certain policies and institutions, we are not entitled to talk in their favour... because some people is going to say... a strawman. Some people should cool down.     

[Velasco]

I seem to have touched a nerve. Actually, not only your nerve - got some congratulating private messages from our Northern European friends here 

What nerve? National pride perhaps?  See, certain posters from that geographical origin -who apparently have congratulated you- have used the same argumentation before. It seems to be easier than discussing subjects seriously. In any case, I've been always against to raise discussion as a war between the north and the south. It's way too jingoistic to my taste, aside a grossly false simplification. If you care to read some of the last articles by Krugman, you will notice that Europe is facing more economic disasters: what he calls an "arc of decline" affecting countries in northern Europe. If people fails to relate problems with the flaws of the Eurozone and the European construction -and addressing them would be touching a real nerve- that's not my fault. I know you feel much more comfortable insulting a random Greek minister. No, I don't like the argumentative style, but I don't feel particularly affected by it . It's sad, however, that you put yourself at the low level of a teenage poster. Actually, the quality of this forum in general is decreasing alarmingly.